Iran’s renewed anti-corruption drive ill-conceived from the start

Iran’s renewed anti-corruption drive ill-conceived from the start – Since coming to power in summer 2013, Iranian President Hassan Rouhani has identified the fight against corruption as one of the highest priorities of his administration.

Iran’s renewed anti-corruption drive ill-conceived from the start

This commitment was underscored at an anti-corruption conference in early December 2014, where Rouhani delivered a spirited speech, vowing to combat corruption and the monopolies that underpin it.

Whilst it may be politically convenient to direct attention on the IRGC, this is not necessarily indicative of a serious drive to tackle corruption in Iran.

Corruption is a serious and, by all accounts, an intensifying problem in Iran. Tackling it root and branch requires not only a radical re-appraisal of the structures of the Iranian economy, but also a critical re-evaluation of popular culture and ordinary Iranians’ attitudes to their socio-economic obligations.

A perennial quest

One of the problems with Iranian anti-corruption drives is the fact that it is couched in intensely ideological language. There is a solid belief that the system as a whole is robust and clean and that deviant individuals and groups are the source of corruption.

This belief reflects the origins of the anti-corruption effort, which began in earnest in the early 1990s during the first presidential term of Ali Akbar Hashemi Rafsanjani.

There is widespread belief in establishment circles in Tehran that the country was largely free of governmental corruption in the 1980s when it was in the midst of war and revolutionary transition. This idea is tied to strongly held notions of revolutionary purity and the quest to prevail in the so-called “imposed war” (i.e. the Iran-Iraq War of the 1980s). As a result, it is a very difficult perception to challenge, let alone dislodge.

In the past quarter of a century Iranian leaders and high officials have consistently called for a zero tolerance approach to corruption and have promised to deal harshly with culprits. This approach is exemplified by the highest authority in the land, the leader Ayatollah Khamenei, who periodically warns of the dangers of corruption and beseeches officials to adopt a modest lifestyle.

These figures are reinforced by regular headline-grabbing corruption scandals. The case of Iranian billionaire, Babak Zanjani, who was arrested in December 2013 on charges of defrauding the public purse to the tune of $1.9 bn, came as a huge shock to the establishment. Zanjani had been utilized by the previous Ahmadinejad administration to help Iran defeat the sanctions regime.

The Zanjani affair came on the heels of a banking scandal which involved the fraudulent acquisition of $2.6 bn in funds. A key player in the fraud, Mahafarid Ami-Khosravi, was executed in May. And then there is the case of insurance fraud, involving former Vice President, Mohmmad Reza Rahimi. The latter was reportedly given a custodial sentence in relation to the fraud, but there is no indication that he has actually gone to prison.

These scandals are, of course, only the tip of the iceberg, as ordinary Iranians have to wrestle with an expansive, inefficient and corrupt bureaucracy on a daily basis. Punishing key players and high officials caught up in scandals involving astronomical sums will not necessarily deal with the more pressing problem of petty corruption that affects every Iranian.

The wrong target

In the midst of several high-profile corruption scandals, it is understandable that the Rouhani administration has chosen to take a rhetorical swipe at the IRGC. The Revolutionary Guards (or Pasdaran) are a soft target from a political point of view as so much propaganda and misinformation surrounds their involvement in the economy.

There is nothing original in Rouhani’s approach as even the former President Ahmadinejad (who was initially thought to be close to the IRGC) took swipes at the Pasdaran, on one occasion describing them as “smugglers”.

The IRGC is indeed involved in the Iranian economy on a strategic level. The Pasdaran manage most of the country’s large infrastructure projects through their Khatam al-Anbia engineering arm. But instead of reflexively seeing this as a monopoly, there is the counter argument that the IRGC is filling a vacuum which the private sector cannot.

Furthermore, whilst the IRGC’s critics accuse it of distorting the Iranian economy, they don’t take sufficient stock in the fact that the Pasdaran supply a dependable layer of management in a country lacking in adequate managerial expertise.

If the Rouhani administration is serious about tacking corruption then it must come to grips with structural features and forces that go much deeper than the IRGC (which has only been around for 35 years). The issue of taxation and public attitudes toward paying taxes is of paramount importance, especially as the government will be less reliant on oil revenues in the years and decades ahead.

The issue of taxation and broader economic and commercial regulation and enforcement go to the heart of popular attitudes on economic and financial affairs. For several generations, Iranians have become accustomed to their government using oil and natural gas revenues to supply a wide range of goods and services, either free of charge, or at a subsidized price.

A shift in public attitudes, so that rights and obligations are placed on an equal footing, is as important to fighting corruption as is dealing with an inefficient bureaucracy and corrupt officials. A rhetorical approach that focusses on soft targets is doomed to fail.

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